Orange County economy expected to accelerate through 2015

Orange County's better-than-expected job growth is expected to continue to drive the region's housing recovery, according to a UCLA report.

New housing development is projected to grow in Orange County through 2015… (Mark Boster, Los Angeles…)

Orange County's economy — a standout in Southern California — is expected to accelerate through 2015, as the region's better-than-expected job growth drives the county's housing recovery, according to a UCLA report released Tuesday.

Recent revisions from the state's Employment Development Department showed that Orange County gained more jobs than originally estimated. Since February 2012, employers' payrolls grew 2.6%, adding 35,200 net jobs, according to state figures.

California payrolls, in comparison, grew 2.1% during the same period.

The job growth is concentrated in the professional and business services sector, which includes occupations such as accountants, lawyers and architects. And the increase in such high-salary work has boosted the housing recovery in the region, said Jerry Nickelsburg, a senior economist with the UCLA Anderson Forecast.

Existing home sales, for instance, rose to 34,380 last year from 29,398 in 2011 — a 17% rise. That figure is expected to grow 12% this year, the report said.

New housing development is projected to grow as demand for multi-unit housing continues. At the same time, the number of homes entering foreclosure is expected to decline.

"There is widespread belief that foreclosures will begin to increase again, but such a situation is unlikely," economists wrote. "As prices rise and job growth continues, more homeowners will remain current on their mortgages, and fewer will enter the foreclosure process."

The region's economic recovery, now kicking into high gear, is expected to cause the county's population to grow 146,000 by 2017, according to the UCLA forecast.

"Job growth brings people in," Nickelsburg said. It's "not true all over California, but Orange County is a place that's growing."

But folks aren't moving to the county for just any job. They're moving there for well-paying jobs in technology and healthcare.

The growth in office jobs has been a boon for the commercial real estate market. Vacancy rates for the office market have fallen to as low as 13% in some parts of the county, the forecast reports.

The tourism industry, anchored by two Disney amusement parks, has also driven economic activity in the area.

The leisure and hospitality sector, which outperformed all other sectors, has grown 4.7% since February 2012, adding 8,200 jobs.

Economists predict February's 6.5% unemployment rate will decline to 6.1% next year and return to a more normal level of 5.2% by 2015.

But it will take several more years for the county's jobless rate to reach a pre-recession level of about 4%, economists said in the report: "As workers rejoin the labor force and high school and college graduates search for their first jobs, growth in the size of the labor force will prevent the unemployment rate from falling quickly."